Tech titan Microsoft this week unveiled a decentralized identity (DID) network built on the bitcoin blockchain.

The company noted that blockchain technology has the potential to create identity systems that highly secure and censorship-resistant. However, the technology’s transactional volumes are extremely limited at present, and cannot meet the global demand stemming from DID systems.

“The most robust, decentralized, public blockchains operate at just tens of transactions per second, nowhere near the volume a world full of DIDs would demand,” it said.

The key issue here was to improve performance and scale DID systems while maintaining the properties of decentralization and self-ownership. To address this challenge, Microsoft teamed up with the members of Decentralized Identity Foundation (DIF) – ConsenSys and Transmute – to develop a blockchain-agnostic protocol for creating scalable DID networks, called Sidetree.

Building upon this protocol, Microsoft developed Identity Overlay Network (or ION) which runs atop the Bitcoin blockchain. It is based on an evolving set of open standards developed in collaboration with DIF members.

“ION is a public, permission-less, open network anyone can use to create DIDs and manage their Public Key Infrastructure (PKI) state. ION is designed to deliver the scale required for a world of DIDs, while inheriting and preserving the attributes of decentralization present in the Bitcoin blockchain,” Microsoft explained.

Furthermore, the company said that it has observed “tens-of-thousands of DID operations per second” on low-powered consumer reference hardware.

Speaking to CoinDesk, Yorke Rhodes, a program manager on Microsoft’s blockchain engineering team, said that the team has been working for a year on a key signing and validation software relying on public blockchains, such as bitcoin or Ethereum, but capable of handling “far greater throughput than the underlying blockchain itself.”

Microsoft said that it has deployed an early preview build of ION on Azure. It is also teaming up with ecosystem partners to operate ION nodes. Some of the organizations who are joining the project to run nodes include Equinix, Casa, Learning Machine, Civic, and Cloudflare.

“In the coming months, we’ll work with open source contributors and members of identity community to prepare for a public launch of the ION network on Bitcoin mainnet,” it said.